- Pipeline will gain the most market share of all freight modes over the next decade, driven by growth in U.S. oil production, according to the American Trucking Associations' (ATA) annual forecast.
- The ATA predicts that pipeline tonnage will grow by 5.2% in 2018 (more than double its growth in 2017) and by 10% each year from 2019 to 2024. The forecast estimates the capital investment in pipeline construction could be more than $50 billion over the next decade.
- Truck and rail could lose significant market share (roughly 3% to 5% each) if the ATA's predictions are correct.
"It is important to note that the loss of market share doesn't mean that actual tonnage declines for all other modes. In fact, the opposite is true. However, pipeline tonnage will grow by far the fastest among all the modes, increasing an astounding 146% through 2029, thus increasing its market share," wrote ATA economist Bob Costello in his opening message in the report.
Pipeline is a growing freight mode as a result of positive indicators in the U.S. energy sector, namely investments in the liquefied natural gas industry on the Gulf Coast and the increased flow of tar sands oil down from Canada.
The growth is good news for the other freight modes, as both rail and trucks extend the reach of pipelines. Trucks can carry about 200 barrels (9,000 gallons). They're used primarily for moving refined fuel to distribution plants or gas stations, generally not exceeding around 50 miles. And rail is becoming an increasingly important part of the energy supply chain, as crude oil production in the Permian Basin of Texas exceeds pipeline capacity.
Overall, the ATA predicts that total freight volume will increase by 35.6% by 2029, but growth will slow down from 2.5% annual growth through 2024 to 2.2% annual growth 2025-2029.
Plenty of factors could still derail these bullish predictions for pipeline and the effects in rail and trucking. Pipelines are long-term, capital-intensive projects with various physical and regulatory barriers. And while the current tit-for-tat tariffs will likely have little effect on overall freight volumes or growth, according to the ATA, they could affect the price of raw materials needed for large construction projects like pipelines.